The SBP cryptocurrency ban has prevented immediate legalization of digital assets, as the central bank warned that approval without regulation could create major risks.
The Pakistan Virtual Assets Regulatory Authority (PVARA) held its first board meeting on Monday to discuss withdrawing restrictions on cryptocurrencies. However, the State Bank of Pakistan strongly opposed the idea, stating that lifting the SBP cryptocurrency ban without a clear licensing and regulatory framework could trigger compliance and financial stability challenges.
The session was chaired by Special Assistant to the Prime Minister on Blockchain and Crypto, Bilal bin Saqib, and attended by Finance Minister Muhammad Aurangzeb as a special invitee. The SBP governor, federal secretaries of IT and Law, the FBR chairman, the SECP chairman, and representatives of the National Cyber Crime Investigation Agency (NCCIA) also participated.
According to the Finance Ministry, the meeting reviewed the withdrawal of BPRD Circular No. 3 of 2018, which barred financial institutions from dealing in virtual currencies. The directive had declared cryptocurrencies such as Bitcoin, Litecoin, Pakcoin, OneCoin, and DasCoin illegal in Pakistan, instructing banks to report such transactions to the Financial Monitoring Unit (FMU).
Restrictions Imposed Under the SBP Cryptocurrency Ban
Under the SBP cryptocurrency ban, banks, microfinance institutions, and payment service providers are prohibited from processing, holding, or promoting crypto transactions. The central bank has directed that any attempt to deal in these assets must be reported as suspicious activity.
During the meeting, the SBP governor emphasized that removing the ban without safeguards would pose serious risks. Officials noted it could take six to eight months to establish a licensing regime for virtual asset service providers under PVARA.
Finance Minister Aurangzeb separately warned that Pakistan risks slipping back on the FATF grey list due to unregulated crypto activity. He highlighted that 10–15 percent of the population, particularly young people, are already involved in digital businesses, making regulation crucial.
The PVARA board also approved a complaint portal with NCCIA to address concerns related to virtual assets. It further agreed to form committees on taxation, sandbox experimentation, regulatory drafting, and international cooperation, while a draft licensing framework was shared for consultation.
Chairman Bilal bin Saqib said PVARA would balance innovation and investment with financial integrity. Bi-monthly meetings will be held in the coming months to gather input from stakeholders and finalize the regulatory framework.